OAS — Old Age Security
Last updated April 24, 2026 · By Evermore Private Wealth · Government Program
OAS — Old Age Security. Old Age Security (OAS) is a federal pension paid to most Canadians age 65 and over, funded from general government revenues — not from contributions. The 2025 maximum OAS payment is approximately $727 per month (age 65–74) and $800 per month (age 75+). Benefits are clawed back when individual net income exceeds $93,454 (2026 threshold).
Source: Service Canada
Source: CRA, OAS Recovery Tax 2026
Source: Income Tax Act, Part I.2
How OAS works
Unlike CPP, OAS is not based on employment history. To receive a partial OAS, you need 10 years of Canadian residency after age 18. To receive the full OAS, you need 40 years. OAS payments are reviewed quarterly and indexed to inflation.
OAS can be deferred up to 60 months past 65, increasing the benefit by 0.6% per month deferred (7.2% per year, 36% over 5 years). Like delaying CPP, this is one of the highest-return guaranteed decisions in retirement planning.
The OAS clawback (Recovery Tax)
For 2026, OAS begins to be clawed back at $93,454 of net world income, at a rate of 15 cents per dollar over the threshold. It is fully eliminated by approximately $151,668 (age 65–74) or $157,490 (age 75+). The clawback is one of the most punitive features of the Canadian tax system because it stacks on top of your marginal tax rate — the effective marginal rate in the clawback zone can exceed 60% for high-bracket retirees.
What this means for HNW Canadian families
The single biggest OAS planning opportunity for HNW Canadians is income smoothing in the 60–75 window. Pulling RRIF income, capital gains, and corporate dividends in a uniform stream — rather than letting them bunch in one year — is often the difference between full OAS for both spouses and zero OAS for either. We tax-model every client annually to keep both spouses below the clawback threshold; the real value of OAS over a 25-year retirement can exceed $300,000 per spouse.
Worked example — OAS clawback math
An Ontario retiree has $130,000 of net income in 2026. They are over the OAS clawback threshold by $36,546 ($130,000 − $93,454). The clawback is 15% × $36,546 = $5,482 repaid through the OAS Recovery Tax line on their return. Reducing their income by $36,546 — for example by taking $36,546 less from a RRIF and instead pulling from a TFSA — eliminates the entire clawback.
Common Questions
What is the 2025 maximum OAS payment?
The maximum OAS payment for the first quarter of 2025 is approximately $727.67 per month for those aged 65 to 74, and $800.44 per month for those 75 and over. Payments are reviewed quarterly and indexed to inflation.
What is the OAS clawback threshold for 2026?
OAS begins to be clawed back when individual net income exceeds $93,454 in 2026. The clawback rate is 15% of every dollar over the threshold and OAS is fully eliminated at approximately $151,668 (age 65–74).
Should I defer my OAS?
Deferring OAS past 65 increases the monthly payment by 0.6% per month, up to 36% if deferred to age 70. The breakeven age is roughly 81. For healthy clients with longevity in the family, deferral is usually worth it — and is paired with accelerated RRIF withdrawals in the deferral years.
Is OAS taxable?
Yes. OAS is fully taxable as ordinary income and is reported on a T4A(OAS) slip each February.
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